Market losses have eliminated more than a correction territory,” defined as a drop of 10% or more from an index’s previous all-time high.
The broader S&P 500 also experienced a sharp 1.8% decline. Within that index, the technology sector was the day’s worst performer, tumbling by more than 4.2%.
As trillion-dollar tech firms invest hundreds of billions of dollars into constructing artificial intelligence data centers, investors are searching for concrete evidence that this massive spending is generating actual returns.
These concerns weighed heavily on Intel, one of the day’s worst-performing stocks, which cratered 29% in its largest single-day drop on record, according to data reaching back to the 1980s.
Several of Intel’s major competitors also saw their share prices fall. SanDisk dropped 13%, while chip manufacturers AMD, ARM Holdings, Qualcomm, and Marvell each declined by approximately 10%.
The momentum for Friday’s heavy losses began on Thursday, when both Amazon and Intel released quarterly earnings reports that failed to satisfy investors and analysts.
Shares of Amazon fell as much as 10% in post-market trading on Thursday before staging a recovery throughout Friday. The company’s stock ultimately closed the day down just 1.4%.
Meanwhile, the retreat in tech shares appeared to boost demand for U.S. Treasuries, briefly pushing government bond yields lower.
The major AI companies borrowing hundreds of billions to fund data center expansions have tapped into debt markets, which has subsequently increased competition for capital.
Because these corporations are increasingly offering lenders better rates of return than the U.S. government provides on bonds, Treasury yields have climbed in recent months—partly to remain competitive with the private market.
